The Bank will calculate almost PLN 5 per EUR

05.07.2018 17:38 | Marcin Lipka

“The holiday season is upon us, but from the perspective of Polish travellers, foreign currencies are clearly becoming more expensive. However, it is not the exchange rate of the euro or dollar to the zloty that is the most questionable. The most important thing is, first of all, information on the fees that banks charge for using a PLN card abroad. Sometimes they exceed 10% of the total value of the transaction,” writes Marcin Lipka, Conotoxia Senior Analyst.

Over the past few days, the euro has reached the level of 4.40 PLN. This is a dozen or so grosz (PLN 0.01) more than at the beginning of last year's summer holiday period. For an occasional tourist, changing course is certainly burdensome, but it should not spoil a long-awaited holiday. The satisfaction that a holiday brings may be seriously undermined by the fact that through a multi-stage system of fees and commission, the bank may charge up to PLN 0.50 more than the actual rate of the European currency.

Commission after commission

According to the March NBP report on the comparison of fees and commission in the Polish banking sector, the average currency conversion of a transaction (e.g. a transaction in EUR converted into PLN) means a charge of 2.82%. If, we spend for example, EUR 1,000 with our card, then, at the interbank rate of PLN 4.40 per EUR, our bank statement will include the expenditure of PLN 4,524 instead of PLN 4,400. This is a loss of PLN 124.

However, it would be misleading to think that this is the end of the fees for this transaction. Many banks, apart from applying commission on card transactions, also use their own exchange rates, which are significantly different from market rates and those set by payment card issuers.

The spread (difference between buy and sell prices) that is displayed on the exchange rates table is usually at the level of 6%. This means that the selling rate (the one at which you automatically buy e.g. the euro in our non-cash transactions) differs by about 3% from the interbank rate.

As a result, a further 3% should be added to our ‘account’ for the sample transaction. Thus, the result is at the level of PLN 4660. We are already losing PLN 260 and at the same time we paid for the euro PLN 4.66, even though it was in fact worth PLN 4.40. Unfortunately, this is still not the end to expenses. We are still left with the most extreme example.

Attention at a cash machine: according to the bank, EUR 100 amounts to nearly PLN 500

There are banks which are not satisfied with the commission for currency conversion at the level of less than 3% and the inflated sales rate charging the customer with the fee by another 3%. One of the Polish banks applies the following procedure to popular payment or credit cards.

First, we will be charged with a spread of about 3% and then, as if this was not enough, with a commission of 5.9%. For the amount of a thousand euros, our non-cash transaction already costs 4,800 PLN, although it should in fact only cost 4,400 PLN.

If we also decide to withdraw, for example, EUR 100 from a cash machine, then in addition to charging the transaction with 9% of the total amount, (exchange rate from the table and fee for currency conversion) we will pay an additional 10 PLN commission. EUR 100 withdrawn from a cash machine will therefore, cost us PLN 490, which is PLN 50 more than it is actually worth.


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